PAK SUZUKI MOTOR CO. LTD. Versus ABDUL REHMAN
DECISION
These twenty appeals are directed against the order of learned Presiding Officer, Sindh Labour Court No.11I at Karachi, dated 24-1-1991 whereby he, by single order, allowed separate grievance applications of 19 respondents and ordered them to be reinstated with full back benefits as admissible to a permanent workman. The respondents riled separate grievance applications, which were disposed of by single impugned order by the learned Labour Court. The appellants, therefore, filed a single appeal No.KAR-33 of 1991 against the said order with respect to all the respondents. However by way of abundant precaution, the appellant also filed separate appeal against each of the respondent. I propose to dispose of all the twenty appeals by this single decision, as the points of law and fact in all the appeals are similar.
2. I have heard Mr. Syed Qamaruddin Hassan, learned Advocate for the appellants and Mr. Khalilur Rehman Khan, learned representative for the respondents and have also gone through the record and proceedings of the case.
3. The facts are more or less admitted. All the respondents were working in the canteen of the appellant establishment since several years. However, they were not given the benefits and privileges given to other permanent workmen vide the settlements arrived at between the appellants and C.BA. Union on 17-4-1985 and 27-4-1987. In both the aforesaid settlements the C.BA. agreed .that the terms and conditions of settlement would not be applicable to the canteen workers. The respondent and other canteen workers, represented to the appellants to treat them at par with other permanent workers and give them pay and allowances admissible to the permanent workmen. On 9-9-1987 the respondents served a grievance notice upon the appellants with respect to their aforesaid grievances. The appellants, however, decided to give the canteen on contract to a contractor namely Mr. Jaffer Abbas on 30-9-1987 and, therefore, terminated the services of all the canteen workers including the respondents. The respondents, after serving grievance notice upon the appellants filed a grievance petition before the learned Labour Court which was resisted by the appellants on the ground that respondents were not workers and that they had not given grievance notice after the cause of action accrued to them and further that they had been removed from service of the appellants, because of re-organization of their establishment whereby they gave away the canteen on contract.
4. In the arguments before this Tribunal Mr. Syed Qamaruddin Hassan admitted that respondents were permanent workers and, therefore, I need not go into that aspect of the dispute. However his main contention is that the employer has right to re-organise his establishment in order to bring about economy and realise more profit. He states that as a result of this re -organization by which canteen was given on contract the appellants have made savings of about Rs.25,000 per month and, therefore, they terminated the services of the respondents as their services were no more required. He further submitted that they had persuaded the contractor to take the canteen workers in the employment if they agreed to the terms and conditions of the contractor and that in fact 12 of the canteen workers out of whom two had filed grievance applications against appellants had actually joined the contractor and were working in the canteen.
5. It is settled law that the employer has got ample powers to re-organise his trade and establishment and terminate services of such workers whose services become redundant pr surplus due to such re-organisation. There are score of authorities on this proposition. Reference may; however, be made to the case of Zeal Pak Cement Factory Ltd., Hyderabad v. Chairman, West Pakistan Industrial Court and others 1965 PLC 216, Messrs EMESCO Industries Ltd. v. S. Irfan Ahmed and another 1983 PLC 981, Muhammad Serajuddin v. Labour Appellate Tribunal and another 1983 PLC 1286, Soot A Muhammad Aslam v. Messrs M. Iftikhar & Company Ltd: 1985 PLC 989, Lyallpur Cotton Mills v. Punjab Labour Appellate Tribunal and others 1991 PLC 32. However in all these cases the power of the employer to retrench workers as a result of re-organization is recognised by the Courts, provided the action of the employer in re-organization and retrenchment was bona fide. in this context it may be relevant to reproduce the observation of the hon'ble Supreme Court of India in, the case of Tata Oil Mills Co. Ltd. v. Their Workmen reported in 1963 PLC 1062 asunder:--_
"If the Industrial Court is satisfied that the order of discharge is punitive, that it is mala fide, or that it amounts to victimization of unfair labour practice, it is competent to the Industrial Court to set aside the order and, in a proper case, direct the reinstatement of the employee. In some cases, the termination of the employees' services may appear to the Industrial Court to be capricious or so unreasonable that an inference may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bona ride. The test always has to be whether the act of the employer is bona fide or not. If the act is mala fide of appears to be a colourable exercise of the powers conferred on the employer either by the terms of contract or by the Standing Orders, then, notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case."
6. Word `bona fide' has been defined in Black's Law Dictionary to mean `for good faith in good faith'. In Words and Phrases---Permanent Edition, 1968 the word `bona fide' has been defined in or with good faith; without fraud or deceit; genuine. Word `bona fide' some time is used as equivalent to `frankly'. Word `bona fide' has not been defined under any of the Labour Laws. Under clause 27 of the West Pakistan General Clauses Act, 1956 `A thing shall be deemed to be done in "good faith" where it is in fact done honestly, whether it is done negligently or not'. Therefore, it has to be seen whether action of the appellant in giving away the canteen on contract was honest, frank and was not done as a colourable exercise of powers of the appellants in order to deprive the respondents of their rights under the settlements entered with the C.BA.
7. While discussing the meaning of words `bona fide' and `good faith' in context of their use under section 13(3) of the West Pakistan Urban Rent Restriction Ordinance.(VI of 1959), the learned Single Judge of Sindh High Court at Karachi in the case of Mushtaq Ahmed v. Mrs. Mumtaz Zohra Rizvi PLD 1978 Karachi 188 had observed:--
"This definition of the expression `good faith' necessarily, therefore, implies that the demand for possession of the rented premises must be honestly made. Honesty is a state of mind and is, therefore, a psychological fact capable of proof or disproof only by evidence or conduct. The word `bona fide' in the context of the provision in question would also appear to mean the same as 'good faith'. Mala rides, conversely means `in bad faith'. It has been held that action taken for collateral purposes not authorised by the law under which the action is taken or actions taken in fraud of the law are mala fide. It is necessary, therefore, for a person alleging that an action has been taken mala ride to show that the person responsible for taking the action has been motivated by any one of the consideration mentioned above."
8. In the case of Fakhruddin v. Syed Asadullah Shah P L D 1982 Kar. 790, a learned Single Judge of Sindh High Court at Karachi had observed:--
"The `honesty' being a state of mind and a psychological fact can be proved or disproved only by evidence of conduct."
It was further observed that word `bona fide' would mean same as `good faith' and `mala fide' has been defined `action for collateral purposes not authorised by law under which taken or actions taken in fraud of law.' It was further held by learned Single Judge:--
"The landlord would be deemed to have satisfied the Court the conditions of good faith by leading evidence of the reasonableness of his needs and if he succeeds in doing so, the onus would shift to the tenant to prove facts which militate against the existence of good faith or which positively establish the dishonesty of purpose on the part of the landlord to claim possession on the ground of personal need."
9. In the case of Federation of Pakistan v. Saeed Ahmed PLD 1974 SC 151 their Lordships have discussed as to what is mala ride action. At page 171 it is observed:--
"Mala fides is one of the most difficult things to prove and the onus is entirely upon the person alleging mala fides to establish it, because, there is, to start with, a presumption of regularity with regard to all official acts, and action cannot be challenged upon a vague allegation of mala rides."
It was further observed:-- .
"`Mala fides' literally means `in bad faith'. Action taken in bad faith is usually action taken maliciously in fact, that is to say, in which the person taking the action does so out of personal motives either to hurt the person against whom the action is taken or to benefit oneself."
10. In the light of above law and definitions it has to be seen whether action of the appellants in giving out the canteen on contract and thereby terminating the services of the respondents was done in good faith or was mala fide. I have already pointed out that under the two aforementioned agreements between the appellants and their C.BA. Union certain benefits were conferred upon the permanent workers. Under the heading `Applicability of Agreement', it is provided that "canteen/contractor's workers, temporary workers, badli workers and workers recruited for specific contract or project shall not be entitled to any benefits of this agreement irrespective of their length of service with the Company". This clause finds place in both the agreements.
11. I have already pointed out that the learned counsel for the appellants that the respondents were `permanent workmen concedes it. In the 113 aforementioned two agreements certain benefits were given to the permanent , workmen. Under section 39(1)(a) the settlements would be binding on all the parties. Under clause (d) to subsection (1) where Collective Bargaining Agent is one of the parties to the dispute the settlement is binding on all the workers who are employed in the establishment or industry to which industrial dispute 8 arises. These settlements were therefore, binding on the employer and were also applicable to all the workers working in the factory and, therefore, binding upon them also. The employer viz. appellants were legally bound to give the benefits agreed to under the settlement to all the permanent workmen. The question that requires consideration is whether C.B.A. could give up rights on behalf of certain permanent workmen viz. canteen workers. The purpose and spirit behind the establishment of trade unions is that the unions are to negotiate and obtain better terms of employment for the workmen. If the trade union gives up certain rights with respect to workmen, which the employer agrees to give, the Trade Union would be working against the very purpose of C its establishment and such clause in the agreement would be against the `public policy' and `law' and would not be binding. Thus the clauses of agreement giving certain benefits to all the permanent workmen would be binding upon the appellants whereas clause of settlement making the settlement inapplicable to canteen workers, who were also permanent workers, would be void and inoperative.
12. Mr. Syed Qamaruddin Hassan has relied upon the decision of learned Single Judge of Lahore High Court in the case of Managing Director, Punjab Road Transport Board v. Punjab Labour Appellate Tribunal and others 1976 PLC 474 wherein it is held `the agreement arrived at between employer and "Trade Unions" otherwise than in conciliation proceedings, however, binds parties to such agreement and none else." This decision is based on subsection (2) of section 39. However in subsection (1) words `or otherwise and between employer and C.BA union' have been added by Act No. XI of 1976. This amendment has taken place after the case which was decided in 1976 PLC 474. Under subsection (1) as amended even the settlement a6ived at otherwise than during the course of conciliation proceedings would be binding on all the parties to the industrial disputes and including the workers, who are employed in the establishment.
13. The learned Labour Court had discussed at length the question as to ; whether the respondents were permanent workmen keeping in view Service. Rules of the establishment as well as the Standing Orders Ordinance and has rightly come to the conclusion that they were `permanent workmen' which fact, as pointed out above, is conceded by the learned counsel for the appellants.' The respondents have been in service since about a few years before the canteen was given on contract. 1t, therefore, can safely be presumed that the appellants were running the canteen through the workmen for number of years before suddenly they decided to give it on contract on 30-9-1987. It is admitted by Mr. Zaheer Ahmed, Senior Manager of appellant establishment that appellants were earning profits each year. He has also admitted that the facilities, which were given to permanent workers, were not given to the canteen workers. He has also admitted that on 9-9-1987 the canteen workers gave a letter to the appellants whereby they had demanded all the facilities. Under the circumstances the action of the appellants to give the canteen on contract in the same month i.e. on 30-9-1987 requires deeper probe. Mr. Jaffar Abbass, the Contractor had admitted that he did not run any other canteen in Karachi except the canteen of the appellant establishment. From his evidence it appears that no advertisement for giving the canteen on contract was published in newspapers before it was given on contract to the contractor on 30-9-1987. According to him the tenders for canteen were invited in Daily `Jang' dated 26-11-1987. He has also admitted that tender's are not considered by the appellants if not accompanied by Rs.25,000 as earnest money. He admitted that earnest money for the first contract was paid on 4-11-1987 viz. after more than one month of giving of contract. If all the above facts and circumstances are taken into consideration, it would be seen that the appellants had allegedly given the canteen on contract without inviting tenders through advertisement, without deposit of earnest money, soon after the respondents demanded their rights under the settlement. The appellants were running the establishment in profits and there appears to be no reasonable explanation for such hasty action in violation of ordinary course of business, while giving a part of establishment on contract. Obviously the appellants would be making profits by doing the old workers the allowances and other privileges which they were entitled to under the settlement and such an action cannot be p considered as honest act on the part of the appellants to earn profit. This act obviously was done to deprive the respondents of their rights guaranteed under the settlement and, therefore, would be mala fide and nullity in the eyes of law. The Labour Court has rightly set aside the orders of termination of services of respondents and ordered their reinstatement.
14. I find no merits in these appeals which are accordingly dismissed.
H.B.T./1985/Lb. S Appeals dismissed.